Question
A bank offers its customers a 6-year savings plan with the following terms: 4% interest during the first two years (Years 1 and 2) 6%
A bank offers its customers a 6-year savings plan with the following terms:
4% interest during the first two years (Years 1 and 2)
6% interest during the next two years (Years 3 and 4)
8% interest during the final two years (Years 5 and 6).
The bank requires that you make a $10,000 deposit on the day that you open the account (today or Year 0). After that, you must make six equal end-of-year deposits of any amount that you choose over the next six years. The first of these end-of-year deposits will occur one year from today (end of Year 1), the second will occur two years from today (end of Year 2), and so on. The last end-of-year deposit will occur six years from today (end of Year 6). What deposit do you need to make at the end of each of the next six years in order to have exactly $50,000 in the account, six years from today (end of Year 6)?
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